2nd S.C. contract more monitoring for less

COLUMBIA — Taxpayers affected by last fall’s massive hacking at South Carolina’s Department of Revenue should get more identity theft protection services at a lower cost to the state under a new contract for state-paid monitoring.

Budget and Control Board director Marcia Adams said the state intends to award Texas-based CSIdentity Corp. the next contract. People and businesses could begin signing up Oct. 24.

The contract calls for the state to pay up to $8.5 million, depending on how many people sign up over the next year and when. The service is free to the enrollees.

That compares to $12 million paid to the credit bureau Experian through a no-bid contract that Gov. Nikki Haley negotiated after state officials learned of the cyber-theft last October. That service, dubbed Protect My ID, provided daily monitoring of the three credit bureaus for newly opened credit accounts.

Legislators were critical of the no-bid contract and its limited credit notifications. They approved extending services and designated $10 million in the 2013-14 budget toward a second year, but they required the state to seek more consumer protection services through the procurement process.

“Gov. Haley’s main goal has always been to provide the very best in protection and monitoring at the least possible cost and that is exactly what the state will be getting with CSID,” said Haley spokesman Doug Mayer.

Under the contract, CSID will daily monitor only one of the three major credit bureaus, Transunion, for account changes.

But the service provides more extensive surveillance to catch other ways stolen identities are used, including payday loans, sex offender registries and online chat rooms where cyber-thieves sell and buy information. Addresses will be monitored to catch the possibility of mail being fraudulently redirected, while court documents will be tracked in case criminals use an enrollee’s stolen ID when they’re arrested. The tracing of Social Security numbers should alert enrollees to someone creating a false address or alias using their information.

CSID provided the state with two price options. Daily monitoring of all three credit bureaus, in addition to the enhanced surveillance and other offerings, would have cost up to $33 million, instead of $8.5 million.

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State officials encourage taxpayers to sign up.

“In a world where technology is ever-evolving, CSID offers more than credit protection services by providing the added protection of identity theft monitoring and credit restoration to best protect the citizens of South Carolina,” said Revenue Director Bill Blume.

Experian’s service provided help with credit restoration, but in the form of over-the-phone advice on what to do. CSID pledges to do the work for identity theft victims by establishing a limited power of attorney, enabling the company to make the calls and fill out the paperwork to clear records and restore credit.

The Department of Revenue hacker stole unencrypted information from tax filings on 3.8 million adults, 1.9 million of their dependents, and 700,000 businesses. It’s not clear whether any of those people or businesses became identity theft victims as a result.

All 6.4 million are eligible for CSID’s services. To get the monitoring, people must enroll whether they signed up through Experian or not. The service will not transfer. All affected taxpayers are eligible for CSID’s restoration services, whether they enroll or not.

For parents who sign up with CSID, the Social Security numbers of children listed on their tax filings will also be monitored. For businesses, CSID is offering monitoring that includes online domains, IP addresses, and employee emails and passwords. Details on how to sign up are expected in the coming weeks.

Six companies responded to the state’s request for proposals. That included Experian, which declined to participate, saying the state didn’t offer enough for the extended services.

The company instead sent emails earlier this month to the 1.5 million people who signed up for its Protect My ID service, asking them to pay for a second year for about $12. People had until last spring to sign up for a year of the service. Experian’s email told customers they would not be billed for the renewal until their year ran out, but they needed to lock in the rate now. Many people who received the email were unaware the state is providing a second year of services for free.

Experian spokesman Greg Young said anyone who registered under the offer can call to cancel. He did not answer questions about how many people have renewed under the offer, or how many had called to cancel.

The CSID contract could take effect as soon as Oct. 4, if there’s no protest from companies that didn’t win it. Unlike the deal with Experian, taxpayers have a full year to sign up. However, the service would end for everyone on Oct. 31, 2014, unless the Legislature funds a third year in the 2014-15 state budget, at a cost of $6.5 million.